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Aid and Growth Accelerations: An Alternative Approach to Assessing the Effectiveness of Aid

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  • Jonas Dovern
  • Peter Nunnenkamp

Abstract

The paper applies an alternative approach to assess whether foreign aid promotes economic growth in developing countries, based on the concept of temporary growth accelerations suggested by Hausmann, Pritchett and Rodrik. In addition to aggregate aid, we differentiate between major aid categories, including grants, loans and so‐called short‐impact aid. It turns out that aid flows have a small but significantly positive effect on the conditional probability of growth accelerations. This result holds across different estimation methods. However, the significance of results crucially depends on the criteria applied to identify growth accelerations.

Suggested Citation

  • Jonas Dovern & Peter Nunnenkamp, 2007. "Aid and Growth Accelerations: An Alternative Approach to Assessing the Effectiveness of Aid," Kyklos, Wiley Blackwell, vol. 60(3), pages 359-383, August.
    • Handle: RePEc:bla:kyklos:v:60:y:2007:i:3:p:359-383
    DOI: 10.1111/j.1467-6435.2007.00376.x
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    References listed on IDEAS

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    Cited by:

    1. Zhuang Hong & Wang Miao & Daniels Joseph, 2020. "Foreign Aid and Adolescent Fertility Rate: Cross-Country Evidence," Journal of Globalization and Development, De Gruyter, vol. 11(1), pages 1-35, June.
    2. Jean-Claude BERTHELEMY, 2018. "Exits from the Poverty Trap and Growth Accelerations in a Dual Economy Model," Working Papers P234, FERDI.
    3. Brück, Tilman & Xu, Guo, 2012. "Who gives aid to whom and when? Aid accelerations, shocks and policies," European Journal of Political Economy, Elsevier, vol. 28(4), pages 593-606.
    4. Michele Peruzzi & Alessio Terzi, 2018. "Growth Accelerations Strategies," Growth Lab Working Papers 112, Harvard's Growth Lab.
    5. Patrick Guillaumont & Laurent Wagner, 2014. "Aid Effectiveness for Poverty Reduction: Lessons from Cross‑country Analyses, with a Special Focus on Vulnerable Countries," Revue d’économie du développement, De Boeck Université, vol. 22(HS01), pages 217-261.
    6. Guo Xu, 2011. "Growth Accelerations Revisited," Econ Journal Watch, Econ Journal Watch, vol. 8(1), pages 39-56, January.
    7. Jean-Claude BERTHELEMY, 2017. "Dualism, Poverty Exits and Growth Accelerations," Working Papers 4300, FERDI.
    8. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.
    9. Patrick Guillaumont & Laurent Wagner, 2012. "Aid and Growth Accelerations: Vulnerability Matters," Post-Print halshs-00692388, HAL.
    10. Koopman, Eline & Wacker, Konstantin M., 2023. "Drivers of growth accelerations: What role for capital accumulation?," World Development, Elsevier, vol. 169(C).
    11. Patrick Carter & Jonathan R. W. Temple, 2017. "Virtuous Circles and the Case for Aid," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(2), pages 397-425, June.
    12. Balázs Szent-Iványi, 2015. "Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 593-615, December.
    13. Patrick Guillaumont & Laurent Wagner, 2012. "Aid and Growth Accelerations: Vulnerability Matters," Post-Print halshs-00692388, HAL.
    14. repec:unu:wpaper:wp2012-31 is not listed on IDEAS
    15. Lessmann, Christian & Markwardt, Gunther, 2012. "Aid, Growth and Devolution," World Development, Elsevier, vol. 40(9), pages 1723-1749.
    16. Jean‐Claude Berthelemy, 2021. "Exits from the poverty trap and growth accelerations in a dual economy model," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1197-1215, August.
    17. González, Mariano & Larrú, José María, 2012. "Egalitarian aid. The impact of aid on Latin American inequality," MPRA Paper 41660, University Library of Munich, Germany.
    18. Richard Jong-A-Pin & Jakob De Haan, 2008. "Growth Accelerations and Regime Changes: A Correction," Econ Journal Watch, Econ Journal Watch, vol. 5(1), pages 51-58, January.
    19. Pál Czeglédi, 2014. "The theory of interventionism as an Austrian theory of slowdowns," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(4), pages 419-449, December.
    20. Eskander Alvi & Aberra Senbeta, 2012. "Foreign Aid: Good for Investment, Bad for Productivity," Oxford Development Studies, Taylor & Francis Journals, vol. 40(2), pages 139-161, June.
    21. Lessmann, Christian & Markwardt, Gunther, 2009. "Aid, growth and decentralization," Dresden Discussion Paper Series in Economics 09/09, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    22. Peruzzi, Michele & Terzi, Alessio, 2021. "Accelerating Economic Growth: The Science beneath the Art," Economic Modelling, Elsevier, vol. 103(C).
    23. Ferreira, I.A.R. & Simoes, M.C.N., 2013. "Aid And Growth: A Comparative Study Between Sub-Saharan Africa And Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 113-132.
    24. repec:pra:mprapa:55959 is not listed on IDEAS
    25. Johannes Jakubik & Stefan Feuerriegel, 2022. "Data‐driven allocation of development aid toward sustainable development goals: Evidence from HIV/AIDS," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2739-2756, June.

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